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NEW IDEAS ABOUT OLD MODELS

How to Make a Killer Budget!

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In the post, I share strategies for pricing services in audiovisual production, emphasizing the importance of creating budgets that reflect market realities and account for unforeseen events. It is essential to gather relevant information about the project, such as the client and the video's duration, and to create a customized spreadsheet model to track costs. I recommend consulting industry association tables to ensure fair pricing and including a percentage to cover unexpected costs and ensure profitability. After budget approval, it is crucial to manage expenses while maintaining open communication with collaborators and seeking savings where possible. I conclude by emphasizing the importance of building a network of reliable partners to facilitate negotiations and ensure budget compliance.


Pricing services is a topic that comes up frequently in my daily life, not only because I am a producer running a service company but also because many colleagues have questions about how to create their budgets.


A few weeks ago, I made a post titled "How Much to Charge for That Freelance Job?" It was aimed at individual services and considered the financial organization necessary to know your worth, but it can also help you better understand what we are discussing here.


Today, I want to share some strategies I use daily to create a budget that involves hiring various services. The idea is always to organize your thoughts, create a mental map of the activity, and arrive at a value that not only corresponds with market reality but is also safe for dealing with unforeseen events during production.


Photo byDan Dimmock on Unsplash


I take pride in saying that I have never exceeded a budget, whether it was for a third party or my own company, regardless of whether I created that budget. Of course, this pride is somewhat misplaced, as staying within budget is a basic expectation of any producer. Generating a loss on a job is the opposite of any company’s goal, so executing your work aligned with the main objective is not something to boast about.

I know not all producers can say the same, so I’d like to share my strategies for creating and managing a budget intelligently and effectively.


1. Have All the Information


Before starting to create any budget, it’s crucial to gather all the necessary information for executing the work.


Knowing who the client is, whether there are intermediaries, the product to be promoted, the project’s distribution (time, media, and territories), the delivery deadline, and the payment schedule directly influences the service price.


Additionally, it's important to understand what service is being requested. If the client has a script and a delivery reference, that’s ideal; if not, you’ll need to talk and gather more details.


Another detail that often catches us off guard is the video duration and the number of versions the client may need. Ensure this information is clear from the outset so that your budget aligns with the actual delivery.


2. Create Your Own Model


To list the values that need to be paid to each area of a project, nothing beats using a spreadsheet. I know spreadsheets can be intimidating for many, but you don’t need to master all Excel functions to have a useful spreadsheet at this moment.


The goal is for it to be user-friendly for you and to follow your logic, so if you can design your own spreadsheet, you’ll feel much better than using someone else’s layout. If you don’t know where to start, you can use a template but try to adapt it to your needs.



If you prefer to have something to work with, I'm sharing here the spreadsheet model that ANCINE suggests using. I made some modifications to make the visualization a bit easier, but if you think it needs further adjustments, feel free to make those changes. Set the font size and style to what you like, use colors that inspire you, and you'll see how the process of creating the budget becomes easier.



The most important aspect of having a truly useful spreadsheet model is that it should be in a constant state of improvement. As budgets are created, you should keep it pre-filled and make it easier to use. Look for ways to include as much relevant information as possible in the spreadsheet so that when you open it, it prompts you with questions about the project, allowing you to simply fill in the values as you go. The goal is to minimize the chance of forgetting any part of the project during budgeting and remembering it too late when you are already in execution.


If there’s something you often forget to budget for that isn’t included in the spreadsheet, create a line for it and save the new model for your future projects.


When I added a line for "generator" in my spreadsheet, I realized that having this line prompts me to think more carefully about the types of locations I will be filming in and whether I will need power sources that aren’t readily available. Depending on the scale of the production, even if I’m filming in a location with electricity, it’s wise to have a generator to ensure the safety of the production. That line has been there ever since, reminding me to consider whether it's necessary or not; if not, it simply remains at a zero value.


Your budgeting spreadsheet should help you think of everything you need to include that incurs costs, rather than being a document you have to fill in from scratch every time you need to quantify a project. When you fill out your template for the first time, save it and start your next project from it. After a while, you’ll have a solid model that helps you not forget any crucial details.


Use Market Values


To determine the values to include in each item of your spreadsheet, it is sometimes necessary to conduct a brief search. If the project includes elements you have never contracted before, make sure to consult the service providers to know the actual costs.


If you don’t have much time but have many lines to fill, a useful approach is to consult the tables from class associations for each type of service. In this case, I suggest not using the minimum values from these tables but rather adding a percentage to ensure you can hire good professionals within your budget. Use the minimum value only as a reference.


Helpful tables for audiovisual work in São Paulo include those from SINDICINE, SATED, ABRA (thanks, Mariana Brasil), and SINTRA. Check with local class entities to see if they also provide reference tables for the remuneration of the services you need.


Over time, as you build a network of partner collaborators, experience will help you know offhand what each role requires, depending on the complexity of the work you're budgeting.


Don’t Forget the Last Lines


Once you have the values for everything you will need to complete the project, remember that your budget is not just the sum of all these values. This sum is the basis for the final calculation, but it doesn’t end there.


It’s very important to include a percentage in the budget that covers unexpected issues and also ensures the profitability of the company preparing the budget. If you’re starting out, you might include a small percentage to avoid losing the client, but it’s crucial to have something that helps cover the company’s expenses and ensures that the budget is feasible, even if you forgot to consider something. As you gain more clients, it’s important to have a growth in the company's cash flow to invest in equipment and structure, for example, so your percentage should help you achieve this.


The amount you have to pay the government for issuing your invoice should also be included as an extra percentage in a separate line from your profit. Many people get confused at this point.


If your budget totals R$100 and your tax is 6%, what amount do you need to send? I’ve seen more times than I would like people sending R$106 and taking a loss when the tax payment notice arrives the following month with a higher amount. The tax is applied to the total invoice amount, so it will be charged on R$106 in our example. To calculate correctly, use the following formula:


TOTAL OF INVOICE = TOTAL OF SERVICES ÷ (1 - x% - y% - z%)


Where x, y, and z are the percentages you want to include in the budget, such as your administrative fee, tax, commissions, etc.


In our example, it would be:


100 ÷ (1 - 6%) = 100 ÷ 0.94 = R$106.38


Thus, when the government charges 6% on your invoice amount, you will still have your R$100 of budgeted production.


Manage Your Budget Wisely


Once your client approves your budget and you need to execute the project, the goal is to maintain the profit margin you determined or even save more if possible.


When contracting the budgeted items, see where you can still save. The idea here is not to take advantage of your colleagues by paying below market value but to always be attentive to potential excesses and opportunities within the budget.


To ensure I’m not being unfair to anyone, I usually let each collaborator tell me their service value. If it’s below what I’ve budgeted, I have sometimes offered a bit more when I can still generate profit on that line. However, if it’s above, that’s where the negotiation happens—you have to reach that line value. If you can’t, know that you’ll need to adjust other lines to make it work. The total cannot change; think about how to make it happen.


It’s normal to save on one line and spend more on another. Negotiate your budget carefully. If you manage to save on some lines, don’t celebrate just yet; the financial part is only closed when the project ends, so consider that this savings might help cover demands that may arise from unforeseen issues in the same project.


Be a Good Partner


The best way to ensure a budget goes as planned is to be a good partner in your industry.


Sometimes you might not have the funds to pay the usual rate for a specific role, but if you haven’t been stingy in other projects and have compensated everyone fairly, your team might be willing to make exceptions from time to time to help you.


If you can build a reliable network of people to work with and can compensate a lower fee with a better fee in the future or with a frequency of work that makes up for the reduced value, your chances of managing your budget without many hiccups increase significantly.


I can’t deny that it’s your experience and dedication to this pricing process that will make things easier for you, both in estimating the value of each budget line and in negotiating with collaborators during the project. Therefore, always pay attention to what each budget you create and each project you execute teaches you.


In no time, you will probably also feel proud to say that you never spend more than planned on any project, but remember that this is the only real objective of creating a budget. Go further, and keep growing!


Want personalized help? Get in touch, and let’s talk!

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